DAGA ARUN & CO

DAGA ARUN & CO Welcome to our firm located at Gwalior H.O. having branches at Bhopal, Rewa,Sidhi, Indore, Jaipur, New Delhi, Gurugram, Ludhiyana, Lucknow, Hyderabad, Vadodara

30/04/2026

ITAT Delhi Draws a Clear Line: Breach of Limited Scrutiny = Invalid Assessment

The ruling in Vivasvat Retail and IT Services Pvt. Ltd. vs ITO (AY 2016–17) is a strong reminder that jurisdictional discipline is non-negotiable in income-tax proceedings.

📌 What happened:
Case selected for limited scrutiny under CASS to examine share premium u/s 56(2)(viib)
AO bypassed the mandate and made addition of ₹3.47 crore u/s 68
No approval obtained for expanding the scope
⚖️ ITAT’s Firm View:
The AO acted beyond jurisdiction
Expansion of scope without approval is not a procedural lapse — it is a legal defect
Such an assessment is unsustainable in law

✅ Result:
Entire assessment quashed
Addition of ₹3.47 crore deleted in full
💡 Professional Insight: This decision sends a clear signal — limited scrutiny is not a gateway for fishing enquiries. Any addition made outside the approved scope, without following due process, is liable to be struck down entirely.

27/02/2026

*Important GST Case Law – Allahabad High Court (In Favour of Assessee)*

The Hon’ble Allahabad High Court in Sanjay Construction through AR Shivendra Kumar vs State of Uttar Pradesh (Writ Tax No. 161/2026, dated 17.02.2026) has delivered a significant ruling on the issue of unquantified interest in Show Cause Notice (SCN).

*Key Facts*
Department issued SCN for FY 2020-21.
Interest amount was not quantified in the SCN.
However, interest was later demanded in the Order.

*Legal Provisions Discussed*
Section 75(7), CGST Act – Amount demanded in the Order cannot exceed the amount specified in the SCN.
Section 75(9), CGST Act – Interest is payable whether or not specified in the order.

*Hon’ble Court Held*
Section 75(9) applies where interest is missing from the order, not where it is missing from the SCN.
If interest is not quantified in the SCN, it cannot be confirmed in the Order.
Demand violated Section 75(7).
Accordingly, both SCN and Order were quashed, with liberty to the Department to issue a fresh notice.

*Practical Takeaway*
✔ Proper quantification in SCN is mandatory.
✔ Interest cannot be imposed beyond the scope of SCN.
✔ Strong ground available in cases where interest is not specified in notice but demanded in order.
This judgment reinforces the principle of natural justice and procedural compliance under GST.
Colleagues may examine ongoing matters where interest has been confirmed without proper quantification in SCN.

CA Arun Daga

02/12/2025

Here is a practical, ready-to-use compliance checklist for a Small Company (Private Limited) under the Companies Act, 2013, considering the revised limits effective 01-12-2025:

(Paid-up capital ≤ ₹10 Cr AND Turnover ≤ ₹100 Cr

✅ SMALL COMPANY – COMPLIANCE CHECKLIST (FY 2025-26 ONWARDS)

1. BASIC ELIGIBILITY CHECK (First step every year)

Tick ✅ only if ALL are satisfied:

☐ Company is a Private Limited Company
☐ Paid-up share capital ≤ ₹10 Crore
☐ Turnover (as per last P&L) ≤ ₹100 Crore
☐ Company is NOT:

a Holding company

a Subsidiary company

a Section 8 Company

a Public company

governed by Special Act (Bank/NBFC/Insurance etc.)

If even one is NO → ❌ Not a Small Company

2. MEETINGS – BOARD & SHAREHOLDERS

✅ Board Meetings

Small Company needs only 2 Board Meetings in a Financial Year

Requirement:

☐ 1st meeting – between 1 April to 30 September
☐ 2nd meeting – between 1 October to 31 March
☐ Minimum gap: 90 days

> No need for 4 meetings like other companies.

✅ Annual General Meeting (AGM)

☐ AGM to be held within 6 months from end of FY
☐ For new company – within 9 months from FY end
☐ Quorum as per Section 103
(2 members personally present in Private Co.)

3. FINANCIAL STATEMENTS – IMPORTANT RELAXATION

Small Company is NOT required to prepare Cash Flow Statement ✅

Must prepare only:

☐ Balance Sheet
☐ Profit & Loss
☐ Notes to Accounts
☐ Auditor’s Report
☐ Director’s Report

4. ANNUAL FILINGS (ROC)

Form Due Date Small Company benefit

AOC-4 / AOC-4 XBRL Within 30 days of AGM Cash Flow Statement not required ✅
MGT-7A Within 60 days of AGM Shorter form than MGT-7 ✅
ADT-1 Within 15 days of AGM (if required) Small Company: No mandatory rotation ✅

✅ Annual Return (MGT-7A) can be signed by:

Company Secretary OR

If no CS → One Director alone is enough

5. AUDITOR RELATED RELAXATIONS

Small Company is exempt from:

☐ Auditor rotation (Section is not applicable)
☐ Reporting on Internal Financial Controls (IFC) in auditor report
☐ Mandatory internal audit

Still required:

☐ Statutory audit every year
☐ Proper appointment / ratification if applicable

6. DIRECTORS’ REPORT – REDUCED CONTENT

Small Company Director’s Report: ✅ Simplified
❌ Many disclosures under Rule 8 NOT required

Include only:

☐ State of Company’s Affairs
☐ Financial Summary
☐ Director Responsibility Statement
☐ Details of significant changes (if any)

7. INTERNAL AUDITOR – NOT REQUIRED

Applicable only to:

Listed companies
Big turnover/net worth companies

✅ Small Company → NO Internal Auditor required

8. PENALTY BENEFIT (Very Important)

If any default occurs:

Penalty for Small Company = 50% of Normal Company.

This is a big financial advantage.

SUMMARY – KEY BENEFITS AT A GLANCE

Area Normal Company Small Company

Board Meetings 4 ✅ 2
Cash Flow Statement Mandatory ✅ Not required
Annual Return MGT-7 ✅ MGT-7A
Auditor Rotation Required ✅ Not required
Internal Audit Required in many cases ✅ Not required
Penalties Full ✅ 50%
Director’s Report Detailed ✅ Simplified

07/10/2025

TDS on salary under the New Income Tax Act, 2025:

Effective from April 1, 2026, the TDS on salary will be governed by the New Income Tax Act, 2025, which simplifies and consolidates existing provisions.

Key provisions for TDS on salary
1. TDS on salary: Section 392. This section details the rules for deducting tax on salaries, which is a consolidation of the previous Section 192 of the Income Tax Act, 1961.

2. Deduction based on average rate: The employer is mandated to deduct tax at source based on the average rate of income tax for the tax year.

This is calculated by dividing the employee's total estimated tax liability for the year by their estimated total annual income
This average rate ensures a smooth, monthly deduction instead of a large, one-time payment.

3. Employee's choice of tax regime: The average rate will be calculated based on the tax regime (new or old) that the employee has chosen.

4. Employee declaration of income: To ensure an accurate TDS calculation, employees can provide their employer with details of other income or losses from house property. The employer then adjusts the TDS accordingly.

5. Documentation for tax deduction: The law requires the employer to furnish a certificate to the employee, detailing the tax that has been deducted and other particulars, as prescribed by the tax authorities.

-------------***********-------------

06/10/2025

For Companies - MCA Annual Filing FY 2024-25

It’s that time of the year again! However, this year is also the 1st year for new MCA V3 Portal for Annual Return Filings...

Key Points for new MCA V3 Annual Filings

✅ Statutory Audit Report (mandatory) and Tax Audit Report (if applicable) must be signed by 2 Directors & the Auditor - DSC signature will not be considered as valid.
✅ UDIN should be generated on or before 05.09.2025 and mentioned in the Independent Report.Means audit report date must be not later than 5.09.25 in normal conditions.
✅ Comparative figures for 2 years must be shown.
✅ CARO 2020 & Cash Flow Statement mandatory if Paid-up Capital > ₹4 Cr or Turnover > ₹40 Cr.
✅ Disclose Director remuneration, employee count (male/female/transgender), and 11 financial ratios.
✅ Provide PAN of all shareholders and geo-tagged photos of the registered office (inside & outside) showing company name, CIN, address, and coordinates.

Make sure all documents are in place and verified before filing the ROC forms!

03/09/2025

*Stay Yourself Updated on GST*

*Telecommunication towers rightly held movable property; ITC admissible as section 17(5)(d) not attracted: SC*

THE HON'BLE SUPREME COURT OF INDIA
*Commissioner, CGST Appeal-1, Delhi V/s Bharti Airtel Ltd.*, decided on 8-8-2025

👉 *Issue:-*
✔️ _Can ITC would be available on Telecommunication towers?_

👉 *The Hon'ble Supreme Court Judgement:-*
✔️ _SLP dismissed against impugned order of High Court that telecommunication towers does not qualify test of permanency as they are not ‘attached to earth’, they can be dismantled and moved and are never erected with an intent of conferring permanency and their placement on concrete bases was only to enable those towers to overcome vagaries of nature, they can be considered as moveable property eligible for ITC._
*In favour of assessee*

Address

C-1/A, Main Road, Basant Vihar
Gwalior
474007

Opening Hours

Monday 11:11am - 8:08pm
Tuesday 11:11am - 8:08pm

Website

Alerts

Be the first to know and let us send you an email when DAGA ARUN & CO posts news and promotions. Your email address will not be used for any other purpose, and you can unsubscribe at any time.

Contact The Business

Send a message to DAGA ARUN & CO:

Shortcuts

Share